There is a group of life incumbents who have always sold direct – Gerber Life, Colonial Penn, et al. Their direct efforts have focused historically on direct response television advertising to inbound 800#s. They sell low-face term marketing the monthly cost, so a lower-middle income market. Also AIG Direct is attacking this market, and I assume that based on the face levels they emphasize ($500k or so seems to be the max they speak to in the advertising) they are also aiming at mid market and below.
These companies have not moved aggressively to move their businesses online, and are probably missing opportunity as a result. AIG has had ongoing management change and putting a lot of effort into non-US marketings, and cost cutting. Gerber Life is a below-the-radar business owned by Nestle, and toes the line within the Gerber brand – the core product as you probably know is baby food. MetLife put a ton of resource about 5 years ago into trying to open up a digital channel for term life, and also to selling term life in Walmart – those efforts did not bear fruit. The company completely turned over its marketing and digital teams, and is putting energy into rebranding and splitting the company apart to avoid being a global SIFI.
Term Life – or any simple product – is a logical place to anchor a digitally-centered sales effort. Why don’t the big carriers do it?
– Worry about angering the agents – even though the term audience is a different audience, or if the same as buyers of whole life, seeking to solve a problem that whole life won’t solve
– Not excited about term – whole life generates much higher premium dollars per policy, and the carriers continue to put effort into fighting over the shrinking pie of people who want high face, whole life policies
– Probably don’t have efficient enough infrastructures to sell term efficiently. The inefficiency of application processing and underwriting may be palatable for big premium policies, but is unacceptable for term
– Lack the skill sets and capabilities required to build a franchise through digital channels – marketing, data analytics, technology, UX, business model design, etc.
Well designed term, well marketed, is a great place to start a relationship with a millennial couple who have started a family, maybe purchased a home, have assets to protect, and even in a two income household would value some protection for their family. How about a policy that will pay off your student loan debt, as one example of something that would be appealing to the millennial household?